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The high yield investment case revisited

Guest Post by Olivier Debat (UBP) | High yield CDS indices combine a liquidity advantage, an interest rate advantage (no exposure) and a valuation advantage. Thus, we believe that investors concerned about high yield liquidity, its sensitivity to rates or its valuation should switch to high yield CDS indices to gain exposure to the high yield market.

Stress tests: the quality of its judgment

ANIMAL SPIRITS IN WASHINGTON | By Pablo Pardo | Throughout the last two years, bank regulators have identified a number of increasingly exotic assets in the already-full-of-exotic assets banks’ portfolios. For instance, some institutions are accumulating massive amounts of Credit Default Swaps (CDS). At a time when debt spreads are not just falling, but crashing, what is the logic to hedge in such manner? The short answer is: stress tests.

The Greek swap-opera

LONDON | Half an hour before the deadline passed at 20:00 GMT on Friday, the Greek minister for international economic relations Constantine Papadopoulos confidently told Sky…